1 2 3 4 5 6 7 10 ----oo0oo---- 11 12 SULLIVAN CITTADINO, No. 2:23-cv-00322 WBS JDP 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE: DEFENDANTS’ MOTION TO DISMISS 15 BRANDSAFWAY SERVICES, LLC; BRAND FIRST AMENDED COMPLAINT INDUSTRIAL SERVICES, INC.; 16 BRANDSAFWAY INDUSTRIES, LLC; SAFWAY GROUP HOLDING, LLC; and 17 DOES 1 through 20, inclusive, 18 Defendants. 19
20 ----oo0oo---- 21 Plaintiff Sullivan Cittadino brought this action 22 against BrandSafway Services, LLC; Brand Industrial Services, 23 Inc.; BrandSafway Industries, LLC; and Safway Group Holding, LLC 24 (collectively “defendants”), alleging breach of an implied 25 employment contract, and violation of California’s Unfair 26 Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. 27 (First Am. Compl. (“FAC”) (Docket No. 21).) The court previously 28 1 dismissed the complaint in its entirety. (See Docket No. 20.) 2 Defendants now move to dismiss the First Amended Complaint. 3 (Docket No. 22.) 4 I. Factual Background1 5 Plaintiff was an employee of defendants, which provide 6 construction-related services, from 1992 to 2020. (See FAC ¶¶ 7 12-13.) During his 28 years of employment, plaintiff received 8 multiple promotions and consistent annual raises, in addition to 9 performance-based bonuses, retention bonuses, and stock options. 10 (See id. ¶¶ 12-14.) In 2004, plaintiff was promoted to Branch 11 Manager of defendants’ Benicia, California branch. (Id. ¶ 13.) 12 In 2012, he was promoted to Northwest Regional Vice President. 13 (Id.) 14 In July 2020, defendants notified plaintiff that he was 15 going to be terminated in October 2020, but that they would try 16 to find him a different position in the company beginning in 17 2021. (Id. ¶ 28.) No reason was given for the termination. 18 (Id.) On July 30, 2020, defendants presented plaintiff with a 19 proposed severance agreement that did not fully compensate 20 plaintiff for his paid time off (“PTO”) and contained a two-year 21 noncompete clause. (Id. ¶ 32.) After plaintiff notified 22 defendants that he was owed higher PTO compensation than the 23 agreement provided for, defendants removed several provisions 24 from the agreement that were favorable to plaintiff. (Id.) 25 Defendants also tried to pressure plaintiff into accepting the 26 lesser PTO compensation by falsely accusing plaintiff of “taking 27 1 All facts recited herein are as alleged in the First 28 Amended Complaint unless otherwise noted. 1 documents” during his employment, and they stopped trying to find 2 a new position for plaintiff. (Id.) Plaintiff’s employment 3 ended on December 31, 2020. (See id.) The parties later reached 4 a confidential settlement concerning the PTO payments following 5 plaintiff’s filing of a complaint with the California Employment 6 Development Department. (Id. ¶ 33.) 7 Defendants are required to maintain a license from the 8 California Contractors State Licensing Board. (See id. ¶ 42.) 9 One of the licensure requirements is to designate a Responsible 10 Managing Employee, who at the time of reporting must be working 11 the lesser of 32 hours per week or 80% of the total hours per 12 week that the business is operational. (Id.) At the time of his 13 termination, plaintiff was the designated Responsible Managing 14 Employee. (Id.) Defendants continued to identify plaintiff as 15 the Responsible Managing Employee until February 18, 2021. (Id. 16 ¶ 49.) 17 II. Legal Standard 18 Federal Rule of Civil Procedure 12(b)(6) allows for 19 dismissal when a complaint fails to state a claim upon which 20 relief can be granted. See Fed. R. Civ. P. 12(b)(6). “A Rule 21 12(b)(6) motion tests the legal sufficiency of a claim.” Navarro 22 v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The inquiry before 23 the court is whether, accepting the allegations in the complaint 24 as true and drawing all reasonable inferences in the plaintiff’s 25 favor, the complaint has alleged “sufficient facts . . . to 26 support a cognizable legal theory,” id., and thereby stated “a 27 claim to relief that is plausible on its face,” Bell Atl. Corp. 28 v. Twombly, 550 U.S. 544, 570 (2007). 1 Courts are not, however, “required to accept as true 2 allegations that are merely conclusory, unwarranted deductions of 3 fact, or unreasonable inferences.” Sprewell v. Golden State 4 Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see Twombly, 550 5 U.S. at 555. Accordingly, “for a complaint to survive a motion 6 to dismiss, the non-conclusory ‘factual content,’ and reasonable 7 inferences from that content, must be plausibly suggestive of a 8 claim entitling the plaintiff to relief.” Moss v. U.S. Secret 9 Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Ashcroft v. 10 Iqbal, 556 U.S. 662, 678 (2009)). 11 III. Discussion 12 A. Breach of Implied Employment Contract 13 Plaintiff alleges that the parties had an implied 14 contract guaranteeing that plaintiff would only be terminated for 15 good cause. (FAC ¶ 38.) Defendants argue that plaintiff has not 16 adequately alleged the existence of an implied employment 17 contract. 18 Under California law, there is a strong statutory 19 presumption of “at will” employment. See Guz v. Bechtel Nat. 20 Inc., 24 Cal. 4th 317, 335 (2000) (citing Cal. Lab. Code § 2922). 21 “An at-will employment may be ended by either party at any time 22 without cause, for any or no reason . . . .” Id. (internal 23 quotation marks omitted). The at-will presumption can be 24 overridden by contractual agreement between employer and 25 employee, either express or implied. Id. at 336. 26 In determining whether an implied employment contract 27 exists under California law, courts examine “‘the totality of the 28 circumstances’” and look to a number of factors, including “‘the 1 personnel policies or practices of the employer, the employee’s 2 longevity of service, actions or communications by the employer 3 reflecting assurances of continued employment, and the practices 4 of the industry in which the employee is engaged.’” Id. at 336- 5 37 (quoting Foley v. Interactive Data Corp, 47 Cal. 3d 654, 680- 6 81 (1988)). “Where there is no express agreement, the issue is 7 whether other evidence of the parties’ conduct has a tendency in 8 reason to demonstrate the existence of an actual mutual 9 understanding on particular terms and conditions of employment.” 10 Id. at 337 (internal quotation marks, citation, and emphasis 11 omitted). 12 Here, plaintiff alleges that he had a long and 13 successful employment history, which defendants rewarded with 14 various forms of compensation, including retention bonuses. (FAC 15 ¶ 14.) Plaintiff also alleges that he entered into written 16 agreements with defendants that, while they contained no express 17 for-cause protections, are evidence of the parties’ agreement 18 that he would only be terminated for good cause. Plaintiff 19 states that these agreements –- including an Employee Shareholder 20 Agreement, Employee Stock Option Agreement, and Confidentiality, 21 Non-Solicitation and Invention Assignment Agreement –- were 22 entered into “in consideration of [plaintiff’s] . . . continued 23 employment.” (Id.
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1 2 3 4 5 6 7 10 ----oo0oo---- 11 12 SULLIVAN CITTADINO, No. 2:23-cv-00322 WBS JDP 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE: DEFENDANTS’ MOTION TO DISMISS 15 BRANDSAFWAY SERVICES, LLC; BRAND FIRST AMENDED COMPLAINT INDUSTRIAL SERVICES, INC.; 16 BRANDSAFWAY INDUSTRIES, LLC; SAFWAY GROUP HOLDING, LLC; and 17 DOES 1 through 20, inclusive, 18 Defendants. 19
20 ----oo0oo---- 21 Plaintiff Sullivan Cittadino brought this action 22 against BrandSafway Services, LLC; Brand Industrial Services, 23 Inc.; BrandSafway Industries, LLC; and Safway Group Holding, LLC 24 (collectively “defendants”), alleging breach of an implied 25 employment contract, and violation of California’s Unfair 26 Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. 27 (First Am. Compl. (“FAC”) (Docket No. 21).) The court previously 28 1 dismissed the complaint in its entirety. (See Docket No. 20.) 2 Defendants now move to dismiss the First Amended Complaint. 3 (Docket No. 22.) 4 I. Factual Background1 5 Plaintiff was an employee of defendants, which provide 6 construction-related services, from 1992 to 2020. (See FAC ¶¶ 7 12-13.) During his 28 years of employment, plaintiff received 8 multiple promotions and consistent annual raises, in addition to 9 performance-based bonuses, retention bonuses, and stock options. 10 (See id. ¶¶ 12-14.) In 2004, plaintiff was promoted to Branch 11 Manager of defendants’ Benicia, California branch. (Id. ¶ 13.) 12 In 2012, he was promoted to Northwest Regional Vice President. 13 (Id.) 14 In July 2020, defendants notified plaintiff that he was 15 going to be terminated in October 2020, but that they would try 16 to find him a different position in the company beginning in 17 2021. (Id. ¶ 28.) No reason was given for the termination. 18 (Id.) On July 30, 2020, defendants presented plaintiff with a 19 proposed severance agreement that did not fully compensate 20 plaintiff for his paid time off (“PTO”) and contained a two-year 21 noncompete clause. (Id. ¶ 32.) After plaintiff notified 22 defendants that he was owed higher PTO compensation than the 23 agreement provided for, defendants removed several provisions 24 from the agreement that were favorable to plaintiff. (Id.) 25 Defendants also tried to pressure plaintiff into accepting the 26 lesser PTO compensation by falsely accusing plaintiff of “taking 27 1 All facts recited herein are as alleged in the First 28 Amended Complaint unless otherwise noted. 1 documents” during his employment, and they stopped trying to find 2 a new position for plaintiff. (Id.) Plaintiff’s employment 3 ended on December 31, 2020. (See id.) The parties later reached 4 a confidential settlement concerning the PTO payments following 5 plaintiff’s filing of a complaint with the California Employment 6 Development Department. (Id. ¶ 33.) 7 Defendants are required to maintain a license from the 8 California Contractors State Licensing Board. (See id. ¶ 42.) 9 One of the licensure requirements is to designate a Responsible 10 Managing Employee, who at the time of reporting must be working 11 the lesser of 32 hours per week or 80% of the total hours per 12 week that the business is operational. (Id.) At the time of his 13 termination, plaintiff was the designated Responsible Managing 14 Employee. (Id.) Defendants continued to identify plaintiff as 15 the Responsible Managing Employee until February 18, 2021. (Id. 16 ¶ 49.) 17 II. Legal Standard 18 Federal Rule of Civil Procedure 12(b)(6) allows for 19 dismissal when a complaint fails to state a claim upon which 20 relief can be granted. See Fed. R. Civ. P. 12(b)(6). “A Rule 21 12(b)(6) motion tests the legal sufficiency of a claim.” Navarro 22 v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The inquiry before 23 the court is whether, accepting the allegations in the complaint 24 as true and drawing all reasonable inferences in the plaintiff’s 25 favor, the complaint has alleged “sufficient facts . . . to 26 support a cognizable legal theory,” id., and thereby stated “a 27 claim to relief that is plausible on its face,” Bell Atl. Corp. 28 v. Twombly, 550 U.S. 544, 570 (2007). 1 Courts are not, however, “required to accept as true 2 allegations that are merely conclusory, unwarranted deductions of 3 fact, or unreasonable inferences.” Sprewell v. Golden State 4 Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see Twombly, 550 5 U.S. at 555. Accordingly, “for a complaint to survive a motion 6 to dismiss, the non-conclusory ‘factual content,’ and reasonable 7 inferences from that content, must be plausibly suggestive of a 8 claim entitling the plaintiff to relief.” Moss v. U.S. Secret 9 Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Ashcroft v. 10 Iqbal, 556 U.S. 662, 678 (2009)). 11 III. Discussion 12 A. Breach of Implied Employment Contract 13 Plaintiff alleges that the parties had an implied 14 contract guaranteeing that plaintiff would only be terminated for 15 good cause. (FAC ¶ 38.) Defendants argue that plaintiff has not 16 adequately alleged the existence of an implied employment 17 contract. 18 Under California law, there is a strong statutory 19 presumption of “at will” employment. See Guz v. Bechtel Nat. 20 Inc., 24 Cal. 4th 317, 335 (2000) (citing Cal. Lab. Code § 2922). 21 “An at-will employment may be ended by either party at any time 22 without cause, for any or no reason . . . .” Id. (internal 23 quotation marks omitted). The at-will presumption can be 24 overridden by contractual agreement between employer and 25 employee, either express or implied. Id. at 336. 26 In determining whether an implied employment contract 27 exists under California law, courts examine “‘the totality of the 28 circumstances’” and look to a number of factors, including “‘the 1 personnel policies or practices of the employer, the employee’s 2 longevity of service, actions or communications by the employer 3 reflecting assurances of continued employment, and the practices 4 of the industry in which the employee is engaged.’” Id. at 336- 5 37 (quoting Foley v. Interactive Data Corp, 47 Cal. 3d 654, 680- 6 81 (1988)). “Where there is no express agreement, the issue is 7 whether other evidence of the parties’ conduct has a tendency in 8 reason to demonstrate the existence of an actual mutual 9 understanding on particular terms and conditions of employment.” 10 Id. at 337 (internal quotation marks, citation, and emphasis 11 omitted). 12 Here, plaintiff alleges that he had a long and 13 successful employment history, which defendants rewarded with 14 various forms of compensation, including retention bonuses. (FAC 15 ¶ 14.) Plaintiff also alleges that he entered into written 16 agreements with defendants that, while they contained no express 17 for-cause protections, are evidence of the parties’ agreement 18 that he would only be terminated for good cause. Plaintiff 19 states that these agreements –- including an Employee Shareholder 20 Agreement, Employee Stock Option Agreement, and Confidentiality, 21 Non-Solicitation and Invention Assignment Agreement –- were 22 entered into “in consideration of [plaintiff’s] . . . continued 23 employment.” (Id. ¶ 15.) These agreements were allegedly 24 presented to plaintiff and a limited number of higher-level 25 employees as a “retention incentive.” (Id. ¶ 16.) 26 Defendants also provided plaintiff with a Management 27 Incentive Compensation plan, which was also offered to a select 28 few employees that defendants “intended to retain indefinitely” 1 due to the employees’ value. (Id. ¶ 19.) In April 2019, 2 defendants communicated the details of this plan to plaintiff, 3 including an explanation that they intended to consistently 4 continue the program “from year to year.” (Id. ¶ 18.) Notably, 5 defendants also allegedly provided a Retention Bonus payout plan 6 “in conjunction with [their] repeated assurances of [plaintiff’s] 7 job security, and in exchange for [plaintiff’s] commitment to 8 continuing employment.” (Id. ¶ 20 (emphasis added).) 9 Collectively, these allegations are sufficient to 10 support a breach of implied contract claim under California law. 11 See Foley, 47 Cal. 3d at 682 (trier of fact could find breach of 12 an implied employment contract where the parties entered a 13 noncompetition, information disclosure, and invention assignment 14 agreement and plaintiff “alleged repeated oral assurances of job 15 security and consistent promotions, salary increases and 16 bonuses”). Accordingly, the court will deny the motion to 17 dismiss the first claim for breach of an implied employment 18 contract.2 19 2 Defendants also argue that the First Amended Complaint 20 improperly “commingles” allegations against the defendants by failing to specify which actions are attributable to each 21 defendant, in violation of Rule 8. The court finds this argument 22 lacking in merit because the defendants here are all part of the same corporate structure that employed plaintiff. Unlike the 23 defendants in the cases relied upon by defendants, defendants here do not appear differently situated in a meaningful way and 24 the manner of pleading does not appear to lead to undue confusion or uncertainty. See McHenry v. Renne, 84 F.3d 1172, 1175 (9th 25 Cir. 1996) (affirming dismissal of complaint where there were twenty individual and organizational defendants, and complaint 26 was drafted such that it was “impossib[le]” to “figure[e] out 27 which defendants were allegedly liable for which wrongs”); Doe v. WebGroup Czech Republic, No. 2:21-cv-0242 8VA PSK, 2022 WL 982248 28 (C.D. Cal. Jan. 13, 2022) (dismissing complaint that made 1 B. Unfair Competition Law 2 As the basis of his UCL claim, plaintiff alleges that, 3 following his termination, defendants continued to falsely 4 represent plaintiff as their Responsible Managing Employee to the 5 California Contractors State Licensing Board in order to comply 6 with the board’s licensing requirements. (See FAC ¶¶ 42, 49.) 7 An individual suing under the UCL must have “suffered injury in 8 fact” and “lost money or property.” Cal. Bus. & Prof. Code § 9 17204. 10 The First Amended Complaint does not contain any 11 additional allegations that support statutory standing under the 12 UCL and plaintiff’s Opposition relies solely on inapposite 13 authority. (See FAC ¶¶ 41-50; Opp’n (Docket No. 24) at 7-9.) 14 Plaintiff has therefore failed to cure the defects the court 15 identified in its previous order. Accordingly, the court will 16 dismiss plaintiff’s second claim for violation of the UCL for the 17 same reasons explained in the court’s prior order. (See Docket 18 No. 20 at 7-8.) 19 The question now is whether plaintiff should be given 20 leave to amend the UCL claim again. Under Federal Rule of Civil 21 Procedure 15(a), a party may amend its pleading with the court’s 22
23 identical allegations against more than a dozen foreign and domestic individuals and corporate entities); Destfino v. 24 Kennedy, No. 08-cv-1269 LJO DLB, 2009 WL 1706095, at *5 (E.D. Cal. June 9, 2009), aff’d sub nom. Destfino v. Reiswig, 630 F.3d 25 952 (9th Cir. 2011) (dismissing complaint that made identical allegations against more than 20 individual and organizational 26 defendants, some of whom had been dismissed, in a way that 27 created “ambiguity and uncertainty” and “unnecessarily complicate[d] the matter with superfluous pleadings”). 28 enn mene enn nn NO EEE EO OE
1 leave, which should be “freely give[n] . . . when justice so 2 requires.” Fed. R. Civ. P. 15(a) (2). Leave “should be granted 3 unless amendment would cause prejudice to the opposing party, is 4 sought in bad faith, is futile, or creates undue delay.” Johnson 5 v. Mammoth Recreations, 975 F.2d 604, 607 (9th Cir. 1992). 6 The court finds that further amendment of plaintiff's 7 | UCL claim would be futile. Based on the foregoing analysis, the 8 court does not see, and plaintiff’s counsel has not pointed to, 9 any possible set of facts that could cure the deficiencies of the 10 UCL claim, to the extent it is based on defendants’ 11 representation of plaintiff as the Responsible Managing Employee. 12 IT IS THEREFORE ORDERED that defendants’ motion to 13 dismiss (Docket No. 22) be, and the same hereby is, GRANTED as to 14 | plaintiff’s second claim for violation of the UCL. The motion is 15 DENIED in all other respects. 16 | Dated: August 8, 2023 he ble 7H. Ld. kt UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28